DoD's $20.2M Raytheon contract for CCSS/DRSN logistics support awarded without competition

Contract Overview

Contract Amount: $20,245,372 ($20.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-01-01

End Date: 2025-03-06

Contract Duration: 2,621 days

Daily Burn Rate: $7.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DEPOT LOGISITIC SUPPORT FOR THE COMMAND AND CONTROL SWITCHING SYSTEM (CCSS) DEFENSE RED SWITCHED NETWORK (DRSN)

Place of Performance

Location: SEMINOLE, PINELLAS County, FLORIDA, 33777

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $20.2 million to RAYTHEON COMPANY for work described as: DEPOT LOGISITIC SUPPORT FOR THE COMMAND AND CONTROL SWITCHING SYSTEM (CCSS) DEFENSE RED SWITCHED NETWORK (DRSN) Key points: 1. Contract awarded to Raytheon Company for depot logistic support of critical communication systems. 2. The contract covers the Command and Control Switching System (CCSS) and Defense Switched Network (DSN). 3. Awarded as a sole-source contract, raising questions about potential price efficiencies. 4. The contract duration spans over six years, indicating a long-term need for these services. 5. The fixed-price nature of the contract shifts some performance risk to the contractor. 6. The specific North American Industry Classification System (NAICS) code is 811213 for Communication Equipment Repair and Maintenance.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific technical requirements. Without competitive bids, it's difficult to ascertain if the $20.2 million price represents optimal value for money. The fixed-price contract type provides some cost certainty, but the lack of competition limits the ability to compare pricing against market rates or similar services. Further analysis would require access to detailed cost breakdowns and historical pricing data for this specific system.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This approach is typically justified when a specific system or technology is proprietary or requires specialized expertise only available from a single source. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces. This raises concerns about whether the most cost-effective solution was secured.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of a competitive bidding process. Without competing offers, there is less assurance that the price reflects the best possible value.

Public Impact

The primary beneficiaries are the Department of Defense (DoD) and its various branches relying on secure communication networks. Services delivered include essential depot logistic support for the CCSS and DRSN, ensuring operational readiness. The geographic impact is primarily within Florida (ST, SN), where the contract is managed and potentially where services are rendered or supported. Workforce implications include the potential for specialized technical jobs related to communication equipment maintenance and logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings.
Long contract duration could lead to price increases if not managed carefully.
Dependence on a single contractor for critical communication system support poses a risk.

Positive Signals

Fixed-price contract shifts some financial risk to the contractor.
Raytheon's established role suggests familiarity with the complex systems involved.
Contract supports critical national defense communication infrastructure.

Sector Analysis

The defense logistics and communication equipment maintenance sector is characterized by high technical barriers to entry and significant government spending. Contracts often involve specialized, proprietary systems requiring deep contractor expertise. The market size for such niche services can be substantial, driven by the continuous need for operational readiness and technological upgrades within military branches. This contract fits within the broader IT and Defense sectors, focusing on the maintenance and support of secure communication infrastructure.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, Raytheon Company, is a large defense contractor. There is no explicit information regarding subcontracting plans for small businesses within this award. Without specific set-asides or mandated subcontracting goals, the direct impact on the small business ecosystem for this particular contract is likely minimal, though large prime contractors often engage small businesses in their supply chains.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), as indicated by 'sa'. Accountability measures would stem from the terms and conditions of the firm-fixed-price contract, including delivery schedules and performance standards. Transparency is facilitated through contract award databases, but detailed cost breakdowns and performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Switched Network (DSN) operations
Command and Control Systems Maintenance
Communication Equipment Repair and Maintenance Services
DoD Logistics Support Contracts
Raytheon Company Defense Contracts

Risk Flags

Sole-source award
Lack of competitive benchmarking
Potential for cost inefficiencies
Long-term contract dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.2 million to RAYTHEON COMPANY. DEPOT LOGISITIC SUPPORT FOR THE COMMAND AND CONTROL SWITCHING SYSTEM (CCSS) DEFENSE RED SWITCHED NETWORK (DRSN)

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $20.2 million.

What is the period of performance?

Start: 2018-01-01. End: 2025-03-06.

What is Raytheon Company's track record with similar DoD contracts, particularly for communication systems?

Raytheon Company, now part of RTX, has a long and extensive history of providing complex systems and services to the Department of Defense, including secure communication networks. They are a major defense contractor with significant experience in areas like command and control, intelligence, surveillance, and reconnaissance (ISR), and electronic warfare. Their track record with similar contracts for communication equipment repair and maintenance is generally robust, characterized by their ability to handle large-scale, technologically advanced projects. However, like any large contractor, they have also faced scrutiny and performance reviews on various contracts over the years. Specific details on past performance for the CCSS/DRSN would require deeper analysis of contract performance reports and historical data, which are often not fully public.

How does the $20.2 million contract value compare to similar depot logistic support contracts for communication equipment?

Direct comparison of the $20.2 million contract value for depot logistic support of the CCSS/DRSN is difficult without more specific data points. The uniqueness of the CCSS and DRSN systems, coupled with their critical nature, means that 'similar' contracts are rare. Factors influencing cost include the complexity of the equipment, the required level of technical expertise, the duration of the support (over six years in this case), and the specific maintenance and repair tasks involved. Given the sole-source nature of this award, a direct market benchmark is unavailable. However, for large-scale, long-term sustainment contracts for specialized military communication systems, values in the tens of millions of dollars are not uncommon, though the efficiency and value proposition remain subject to competitive pressures that were absent here.

What are the primary risks associated with a sole-source award for critical communication system support?

The primary risks associated with a sole-source award for critical communication system support include: 1. **Price:** The government may pay a higher price than if the contract were competed, as there is no competitive pressure to drive down costs. 2. **Innovation:** A lack of competition can reduce the incentive for the contractor to innovate or improve services beyond the contract minimums. 3. **Vendor Lock-in:** The government becomes dependent on a single provider, making it difficult and costly to switch vendors in the future, even if performance issues arise. 4. **Reduced Oversight Effectiveness:** While oversight exists, the absence of competing proposals means there's no external benchmark against which to measure the contractor's performance or pricing, potentially weakening negotiation leverage.

What is the expected program effectiveness or outcome of this contract for the DoD?

The expected program effectiveness of this contract is the sustained operational readiness and reliability of the Command and Control Switching System (CCSS) and the Defense Switched Network (DSN). These systems are crucial for secure, real-time voice and data communications within the Department of Defense, supporting command and control functions across various military operations. Effective depot logistic support ensures that these complex communication systems are maintained, repaired, and kept functional, minimizing downtime and ensuring that warfighters have access to reliable communication channels when and where they need them. The contract aims to provide the necessary technical expertise, spare parts, and maintenance services to achieve these critical operational objectives.

How has DoD spending on communication equipment repair and maintenance evolved over the past five years?

DoD spending on communication equipment repair and maintenance has remained a significant and consistent expenditure category over the past five years, reflecting the ongoing need to sustain aging platforms while integrating new technologies. While specific figures fluctuate annually based on budget allocations, operational tempo, and modernization efforts, the overall trend indicates sustained investment. The increasing complexity of communication systems, including cyber resilience requirements and the integration of satellite, terrestrial, and mobile networks, often drives up maintenance costs. Furthermore, the shift towards more networked warfare and data-centric operations necessitates robust and reliable communication infrastructure, ensuring that spending in this area remains a priority. Data from sources like the Federal Procurement Data System (FPDS) would show billions spent annually across various agencies for these services.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Communication Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 7887 BRYAN DAIRY RD, LARGO, FL, 33777

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,225,781

Exercised Options: $21,225,781

Current Obligation: $20,245,372

Actual Outlays: $34,445

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA821815D0001

IDV Type: IDC

Timeline